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Dell'Ariccia, Giovanni; Ferreira, Caio; Jenkinson, Nigel; … - 2018

This paper identifies the various channels that give rise to a "sovereign-bank nexus" whereby the financial health of banks and sovereigns is intertwined. We find that banks and sovereigns are linked by three interacting channels: banks hold large amounts of sovereign debt; banks are protected...

Persistent link: https://www.econbiz.de/10011901498

Do bank insiders impede equity issuances?

Götz, Martin; Laeven, Luc; Levine, Ross - 2021

We evaluate the role of insider ownership in shaping banks' equity issuances in response to the global financial crisis. We construct a unique dataset on the ownership structure of U.S. banks and their equity issuances and discover that greater insider ownership leads to less equity issuances....

Persistent link: https://www.econbiz.de/10012418825

Monetary policy, macroprudential policy and financial stability

Laeven, Luc; Maddaloni, Angela; Mendicino, Caterina - 2022

Recent research developed under the ECB research task force on Monetary Policy, Macroprudential Policy and Financial Stability highlights the existence of trade-offs and spillovers that monetary policy and macroprudential authorities face when deciding on their policy interventions, Monetary...

Persistent link: https://www.econbiz.de/10012822172

Investing in crises

Baron, Matthew; Laeven, Luc; Pénasse, Julien; Usenko, … - 2021

We investigate asset returns around banking crises in 44 advanced and emerging economies from 1960 to 2018. In contrast to the view that buying assets during banking crises is a profitable long-run strategy, we find returns of equity and other asset classes generally underperform after banking...

Persistent link: https://www.econbiz.de/10012518234

The procyclicality of banking : evidence from the euro area

Huizinga, Harry; Laeven, Luc - 2019

Loan loss provisions in the euro area are negatively related to GDP growth, i.e., they are procyclical. Loan loss … procyclicality in the euro area is about twice as large as in other advanced economies. This difference reflects a larger … procyclicality of provisioning in euro area countries already prior to euro adoption, and the divergent growth experiences of euro …

Persistent link: https://www.econbiz.de/10012015566

Growth-and-risk trade-off

Gadea, María Dolores; Laeven, Luc; Pérez-Quirós, Gabriel - 2020

We study the effects of credit over the business cycle, distinguishing between expansions and contractions. We find that there is a growth and risk trade-off in the pace of credit growth over the business cycle. While rapid credit growth tends to be followed by deeper recessions, we also find...

Persistent link: https://www.econbiz.de/10012206296

Debt overhang, rollover risk, and corporate investment : evidence from the European crisis

Kalemli-Ozcan, Sebnem; Laeven, Luc; Moreno, David - 2019

We quantify the role of financial factors behind the sluggish post-crisis performance of European firms. We use a firm-bank-sovereign matched database to identify separate roles for firm and bank balance sheet weaknesses arising from changes in sovereign risk and aggregate demand conditions. We...

Persistent link: https://www.econbiz.de/10011975573

Collateral booms and information depletion

Asriyan, Vladimir; Laeven, Luc; Martin, Alberto - 2019

We develop a new theory of information production during credit booms. In our model, entrepreneurs need credit to undertake investment projects, some of which enable them to divert resources towards private consumption. Lenders can protect themselves from such diversion in two ways:...

Persistent link: https://www.econbiz.de/10011997468